According to the IEG Consulting Group, total North American sponsorship spending is forecasted to rise 5.5 percent or $19.9 billion dollars in 2013. The growth comes largely from sports or entertainment properties where sponsorships are part of more complex marketing deals focused on emotional and experiential benefits. Air shows are more grounded in the festival category where IEG predicts growth will be closer to 2.9 percent.
At last December’s ICAS Convention, sponsorship consultant Bruce Erley conducted an information-packed, four-hour session that peppered the audience with his insights, advice and a bit of sponsorship humor. His perennially popular session ensured that event organizers have the tools to aggressively pursue their piece of the sponsorship pie and rise above the average. The first step was debunking popular sponsorship myths and mistakes.
Myth #1: Sponsorship is Fundraising
Air shows can be a tremendous way to raise funds for a cause or charity, but confusing fundraising as sponsorship may actually limit or hurt the show. “Small organizations want to do a $500 sponsorship, but that’s not going to get you where you want to be,” explained Emma Edgar Harlow, NAS Key West Marketing Director. Harlow arrived on station in December and attended Erley’s session knowing that she had only four short months to sell sponsorship. She still managed to double their cash sponsorship and increase budget-relieving, in-kind sponsorships such as cars for performers, portable toilets and bottled water for air crews. “I realized it was easier to offer them a solution for their business rather than asking for a donation.”
For the Lynchburg Regional Air Show, this was also a major shift in thinking. Vice President Dave Young said, “We are indeed raising support, but we’re not asking for hand outs. We have a business opportunity; that’s our biggest change.” The show now has multiple retail partners such as banks, McDonalds and Wal-Mart offering advance ticket sales, in-store displays and more cross-promotions.
The show hosted the U.S. Navy Blue Angels on short notice in 2011, leaving them with little time to involve most of the local businesses. This time, they’ve engaged the local Chamber of Commerce, taking advantage of informational meetings with civic and business leaders. The air show committee transformed a fairly mundane but typical Chamber after-hours hospital visit into a dynamic opportunity to show off its unique assets. Young explained, “We’re bringing people out to the airport with airplanes that they can touch and climb over, but [we are also helping them to] see ways they can capitalize on this exciting event.”
At a more fundamental level, you can often do damage to any chance of selling a “real” sponsorship if you are perceived by a savvy sponsor as selling a sponsorship when you are really just looking for a donation.
Myth#2: Sponsorship Fees Equal Cost of Asset
If performer X charges $10,000 for a performance fee, a show may offer Company A the “right” to sponsor the performer for the same amount. Sounds simple enough, but it seldom happens that your cost as the event organizer happens to correspond precisely with the value of that sponsorship opportunity to a prospective sponsor. In truth, calculating the appropriate fee for that kind of opportunity is one of the more challenging aspects of sponsorship, because it’s far easier to guess at the correct price tag than it is to put in the research and analysis necessary to develop a fee that reflects its fair market value.
The Lynchburg show followed Erley’s advice and discovered multiple missed opportunities such as paid parking for fans who wanted to be near the ramp rather than riding a shuttle from a remote location. “We traded out the [cost of the] bus service, reducing the cost from the previous year while, at the same time, generating new revenue [by finding a company that wanted to sponsor the bus service],“ said Young. “We fell into the trap of saying, ‘Oh, that’s $15,000,’ when it was maybe [worth] $10,000.” Over-pricing sponsorships is far more common than undervaluing the property, but carefully evaluating a comprehensive list of assets minimizes the risk of either one.
Start with a list of benefits or tangible assets controlled by the show. This would include media, marketing, and publications to collateral materials such as programs, posters, maps, signage and more. However, if 10,000 people attend the event, the percentage of fans that actually saw the banner, program or heard the public address announcement may be as little five percent and is seldom more than 50 percent, depending on the location. IEG values signage-type materials anywhere from one-quarter of one cent to three cents per impression. So, according to IEG’s calculations, at a hypothetical show with attendance of 10,000 over two days, a billboard, program ad, banner or poster would be worth anywhere from $25 to $300. Which makes it a bit easier to see how air shows might inadvertently over-value the benefits received by sponsors.
Does the show offer display space, sampling or couponing? Sampling opportunities are valued at 20 percent of the attendance times $0.15 per sample, according to IEG. So, in the case of our hypothetical show with two-day attendance of 10,000, that would equate to a value of $300 per type of sample distributed. While this list isn’t comprehensive, remember to also log all digital assets: mailing lists, merchandise, and opportunities for demographic research.
Hospitality is one of the easiest benefits to value because it’s generally the face value of the ticket. However, if a chalet also includes the likelihood that performers will visit and mingle with the sponsor’s guests, the sponsorship opportunity will have more value than a chalet that doesn’t include access to performers. Harlow said this year they’re catering more to sponsors, “We wanted the sponsors to feel a little more special, but we’re also offering reserved seating with multiple options for businesses and families.”
The tangible asset inventory process has caused quite a few air show directors to seek medical attention for induced “sponsor attack;” the disturbing realization that your sponsorship opportunities price better in your dreams than in reality.
But, hold on; tangible assets are only part of the puzzle. The key piece belongs to the intangibles: prestige of the event, attendance (the real attendance figure, not the one in your dreams), category exclusivity, historic media coverage/public relations, sponsor protection from ambush marketing techniques, display of community involvement, degree of sponsor clutter, level of audience loyalty, and more. The intangible benefits of air show sponsorships excel when compared to other events in the festival category and have the greatest impact on sponsor fees.
Myth #3: Selling Event Piece-by-Piece Generates Most Revenue
Creating a menu of benefits for a sponsor invites cherry picking where the sponsor may determine they want 50 tickets rather than 100 tickets that are part of the package or the program advertisement you’re offering isn’t as interesting to them as ten more banners. Before long, the potential sponsor has whittled away your package, reducing the monetary benefit to the show. When you use the sponsorship as a chance to solve a specific problem or take advantage of an opportunity, you stand a much better chance of keeping the sponsorship package intact, generating more revenue for your event.
When you sell the event in many small pieces, there is also a tendency to “micro-slice” the event until every last corner or event is sold. While this approach may initially generate money, sponsors are looking for more authentic experiences and ways for the consumer to connect with the brand in the long term. Sponsor overload may turn off your fans and give the sponsors the feeling that they were not truly a part of your event.
Myth #4: Sponsors Are Most Interested In Exposure
What’s most valuable to sponsors? According to IEG, it’s no longer signage. However, including sponsor logos on collateral or media can still enhance the package as long as you TV commercial, radio spot, or website isn’t cluttered with numerous company logos and other identification.
The Home Depot doesn’t need exposure or brand identity, but they are looking for ways to connect the consumer with the orange box in a meaningful way. At some air show, a kids’ workshop on the ramp is promoted months in advance, giving the air show additional exposure and giving parents another reason to come to the event. In Key West, Home Depot is not only promoting the show, but also giving away a family four-pack seating special, plus the chance to win an outdoor grill.
When you’re selling exposure to a prospective client who does not need additional exposure, you also run the risk of appearing unprepared and uninformed. Moreover, this kind of commodity-type exposure is not a particular strength of air shows. The air show industry’s strongest selling point is our ability to help sponsors connect with their own customers and prospective customers in a meaningful, memorable way.
Myth #5: Sponsorship Exclusivity Is Not That Important
In an age when everything is a commodity, category exclusivity is immensely important. It is no longer affordable for two sponsors in the same type of business to do battle against one another at an event that does not offer exclusivity. So you add significant value to prospective sponsors when you offer exclusivity and provide those sponsors with protection against ambush marketing from competitors who try to associate themselves with your event without becoming sponsors.
Myth #6: Gold/Silver/Bronze-types of Tiered Sponsorship Programs Are Popular Sponsor Levels With Businesses
“Bruce [Erley, the instructor for the Sponsorship for Events Workshop at the ICAS Convention] said don’t label your sponsorship levels gold, silver, bronze. When I got back, the folder left for me was exactly that, so I changed it,” said Emma from the NAS Key West Air Show. And remember that renaming the tiers to Airmen/Colonel/General or Sapphire/Emerald/Diamond does not correct the weakness because it’s not a semantics problem; it’s a philosophical problem.
Sponsors want a solution created for their business, their needs, and their goals. Realistically, air shows do not have the staff or volunteers to create a unique package for every potential sponsor. However, creating a custom package for a sponsor category is achievable and can then be tweaked specifically to the business you’re pitching. For example, all auto dealers want to sell cars, so creating a program that drives showroom traffic is key, but creating a program that facilitates – or, better yet, provides incentives for — test drives is even more valuable. Detroit has taken note with several of the major automobile manufacturers offering “ride and drive” programs at air shows where a designated area with hundreds of square feet of concrete is relatively easy to come by. By contrast, even small car dealerships are unlikely to participate in an air show sponsorship program that makes them a “silver sponsor” with 100 chalet tickets, six public address announcements, three banners, and two tickets to the show’s Thursday night, pre-show gala.
Myth #7: Sponsor Sales Is a Loathsome Responsibility
Some people dread cold calling or attending networking meetings where they’re expected to pitch the event’s potential with the hope of securing a sponsorship. However, there are others who thrive on creating dynamic sponsorships that can drive business and relish the opportunity to make money for their show. “It was quite a change moving from a profitable show at NAS Pensacola to NAS Key West where the boss says our goal is to break even. I can’t wait to have a full year to make a difference and make more money for MWR,” said Key West’s Harlow.
Erley’s top seven myths poked fun at misconceptions about sponsorship, but it also highlighted the common challenges most event organizers face. If you’re tasked or selected to sell sponsorship for your show, remember that it’s marketing, not fundraising. It’s a chance to offer genuine return on investment, not a pan-handling exercise. Give your fans a way to connect with your sponsors, Early suggested, and audit your assets to properly price you packages. Lastly, have fun!